EAST GREENVILLE, Pa.,
April 15, 2011 /PRNewswire/ -- Knoll,
Inc. (NYSE: KNL) today announced results for the first quarter
ended March 31, 2011. Net sales
were $220.9 million for the quarter,
an increase of 26.0% from first quarter of 2010. Operating
profit for the quarter was $20.9
million, compared with $9.4
million in the first quarter of 2010. Excluding
restructuring charges of $0.5
million, adjusted operating profit was $21.4 million for the first quarter of 2011, or
9.7% of net sales, an increase of 64.6% when compared to adjusted
operating profit for the first quarter of 2010. Net income
for the first quarter of 2011 was $9.2
million, an increase of 318.2% when compared with the first
quarter of 2010. Earnings per share was $0.20 for the quarter compared to $0.05 per share in the prior year. Adjusted
earnings per share was $0.10 for the
first quarter of 2010.
"Our positive momentum in the marketplace continued as we moved
into 2011," commented Andrew Cogan,
CEO. "The combination of improved economic conditions and our
investments in innovative new designs drove double digit top line
growth and year-over-year margin expansion which helped to more
than double our EPS. We have an exciting program of new product
introductions for our upcoming NeoCon 2011 trade show which
continues to support our strategic focus on design-driven
businesses and product categories."
First Quarter
Results
First quarter 2011 financial
results highlights follow:
|
|
Dollars in Millions Except Per
Share Data
|
|
Three Months
Ended
|
|
Percent
|
|
|
|
|
3/31/11
|
|
3/31/10
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
220.9
|
|
$
|
175.3
|
|
26.0
|
%
|
|
Gross Profit
|
|
|
68.4
|
|
|
56.7
|
|
20.6
|
%
|
|
Operating Expenses
|
|
|
47.0
|
|
|
43.6
|
|
7.8
|
%
|
|
Restructuring Charges
|
|
|
0.5
|
|
|
3.6
|
|
(86.1)
|
%
|
|
Operating Profit
|
|
|
20.9
|
|
|
9.4
|
|
122.3
|
%
|
|
Adjusted Operating
Profit
|
|
|
21.4
|
|
|
13.0
|
|
64.6
|
%
|
|
Net Income
|
|
|
9.2
|
|
|
2.2
|
|
318.2
|
%
|
|
Earnings Per Share –
Diluted
|
|
|
.20
|
|
|
.05
|
|
300.0
|
%
|
|
Adjusted Earnings Per
Share
|
|
|
.20
|
|
|
.10
|
|
100.0
|
%
|
|
Backlog
|
|
|
171.9
|
|
|
138.9
|
|
23.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share and adjusted operating profit are
non-GAAP financial measures and are calculated by excluding from
earnings per share and operating profit items we believe to be
infrequent or not indicative of our operating performance. For a
reconciliation of adjusted earnings per share and adjusted
operating profit to earnings per share and operating profit,
respectively, see "Reconciliation of Non-GAAP Financial Measures"
below.
Net sales for the quarter were $220.9
million, an increase of $45.6
million, or 26.0%, from the first quarter of 2010.
Sales increased double digits across all product categories
with the largest gains occurring in office systems. Backlog
of unfilled orders at March 31, 2011,
was $171.9 million, an increase of
$33.0 million, or 23.8%, compared to
unfilled orders of $138.9 million at
March 31, 2010.
Gross profit for the first quarter of 2011 was $68.4 million, an increase of $11.7 million, or 20.6%, when compared with the
same period in 2010. First quarter 2011 gross margin (gross
profit as a percentage of net sales) decreased to 31.0% from 32.3%
in the same quarter of 2010. The decrease from the first
quarter of 2010 resulted from price deterioration, transportation
inflation, and raw material inflation. The strengthening of
the Canadian dollar and Euro also negatively affected our gross
margin.
Operating expenses for the first quarter of 2011 were
$47.0 million, or 21.3% of sales,
compared to $43.6 million, or 24.9%
of sales, for the first quarter of 2010. The increase in
operating expenses during the first quarter of 2011 was in large
part due to increased sales commissions and incentive compensation
associated with our higher sales volumes. These increases
accounted for $2.7 million of the
increase in operating expenses from the first quarter of 2010 to
the first quarter of 2011.
Our operating profit for the first quarter of 2011 was
$20.9 million, an increase of
$11.5 million, or 122.3%, when
compared with the same period in 2010. Operating profit as a
percent of net sales was 9.5%. Operating profit for the first
quarter of 2011 includes restructuring charges of $0.5 million. Excluding those restructuring
charges, operating profit would have been $21.4 million, or 9.7% of net sales. When
compared with the prior year, adjusted operating margin (operating
profit as a percentage of net sales) for the first quarter of 2011
increased from 7.4% to 9.7%. For a reconciliation of adjusted
operating profit to GAAP operating profit, see "Reconciliation of
Non-GAAP Financial Measures" below.
During the first quarter of 2011, other expense included
$1.8 million of foreign exchange
losses, $1.0 million of miscellaneous
expense related to a negative judicial ruling, offset by
$0.5 million of income. Other
expense for the first quarter of 2010 included $1.5 million of foreign exchange losses offset by
$0.1 million of miscellaneous
income.
The mix of pretax income and the varying effective tax rates in
the countries in which we operate directly affects our consolidated
effective tax rate. The effective tax rate was 36.8% for the
quarter, as compared to 42.3% for the same period last year.
Cash used in operations during the first quarter 2011 was
$16.8 million, compared with cash
provided by operations of $11.5
million the year before. Capital expenditures for the
period totaled $2.0 million compared
to $1.3 million in the comparable
period for 2010. During the first quarter of 2011 the Company
repaid $3.0 million of debt and
purchased $12.4 million of common
stock using stock option proceeds. The Company also paid a
quarterly dividend of $2.8 million,
or $0.06 per share, in the first
quarter of 2011 compared to $0.9
million, or $0.02 per share,
in the first quarter of 2010.
"We have now seen three consecutive quarters of strong orders
and sales growth across all our product categories with systems
showing the greatest improvement this quarter. Since systems has
lagged the other categories in the recovery and declined the most
during this recession, this improvement bodes particularly well for
us because of our strong systems position," stated Barry L. McCabe, EVP & CFO.
Reconciliation of Non-GAAP Financial Measures
This release contains adjusted earnings per share and adjusted
operating profit measures, which are both non-GAAP financial
measures. Adjusted earnings per share and adjusted operating
profit are calculated by excluding from earnings per share and
operating profit items that we believe to be infrequent or not
indicative of our operating performance. For the periods
covered by this release such items consist of expenses associated
with restructuring activities. We present adjusted earnings
per share and adjusted operating profit because we consider them to
be important supplemental measures of our performance and believe
them to be useful to show ongoing results from operations distinct
from items that are infrequent or not indicative of our operating
performance.
Adjusted earnings per share and adjusted operating profit are
not measurements of our financial performance under GAAP and should
not be considered as an alternative to earnings per share or
operating profit under GAAP. Adjusted earnings per share and
adjusted operating profit have limitations as analytical tools, and
you should not consider them in isolation or as a substitute for
analysis of our results as reported under GAAP. In addition, in
evaluating adjusted earnings per share and adjusted operating
profit, you should be aware that in the future we may incur
expenses similar to the adjustments in this presentation. Our
presentation of adjusted earnings per share and adjusted operating
profit should not be construed as an inference that our future
results will be unaffected by unusual or infrequent items. We
compensate for these limitations by providing equal prominence of
our GAAP results and using adjusted earnings per share and adjusted
operating profit only supplementally.
The following table reconciles
adjusted earnings per share to earnings per share for the periods
indicated.
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share -
Diluted
|
|
$
|
0.20
|
|
|
$
|
0.05
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
–
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings per Share -
Diluted
|
|
$
|
0.20
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
adjusted operating profit to operating profit for the periods
indicated.
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
($mm)
|
|
$
|
20.9
|
|
|
$
|
9.4
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
0.5
|
|
|
|
3.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
Profit
|
|
$
|
21.4
|
|
|
$
|
13.0
|
|
|
Net sales ($mm)
|
|
$
|
220.9
|
|
|
$
|
175.3
|
|
|
Operating Margin
|
|
|
9.5
|
%
|
|
|
5.4
|
%
|
|
Adjusted Operating
Margin
|
|
|
9.7
|
%
|
|
|
7.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call Information
Knoll will host a conference call on Friday, April 15, 2011 at 10:00 A.M. EDT to discuss its financial
results.
The call will include slides; participants are encouraged to
listen to and view the presentation via webcast at
http://www.knoll.com; go to "About Knoll" and click on "Investor
Relations".
The conference call may also be accessed by dialing:
North America
|
866 362-4831
|
|
International
|
617 597-5347
|
|
Passcode
|
66311378
|
|
|
|
A replay of the webcast can be viewed by visiting the Investor
Relations section of the Knoll corporate website.
In addition, an audio replay of the conference call will be
available through April 22, 2011 by
dialing 888 286-8010. International replay: 617 801-6888 (Passcode:
10434676).
About Knoll
Since 1938, Knoll has been recognized internationally for
creating workplace and residential furnishings that inspire, evolve
and endure. Today, our commitment to modern design, our
understanding of the workplace and our dedication to sustainable
design has yielded a unique portfolio of products that respond and
adapt to changing needs. Knoll is aligned with the U.S. Green
Building Council and the Canadian Green Building Council and can
help companies achieve Leadership in Energy and Environmental
Design LEED® workplace certification. Knoll is the founding sponsor
of the World Monuments Fund Modernism at Risk program.
Cautionary Statement Regarding Forward-Looking Information
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements regarding Knoll, Inc.'s expected future
financial position, results of operations, revenue levels, cash
flows, business strategy, budgets, projected costs, capital
expenditures, products, competitive positions, growth
opportunities, plans and objectives of management for future
operations, as well as statements that include words such as
"anticipate," "if," "believe," "plan," "goals, " "estimate,"
"expect," "intend," "may," "could," "should," "will," and other
similar expressions are forward- looking statements. This includes,
without limitation, our statements and expectations regarding any
current or future recovery in our industry. Such
forward-looking statements are inherently uncertain, and readers
must recognize that actual results may differ materially from the
expectations of Knoll management. Knoll does not undertake a duty
to update such forward-looking statements. Factors that may cause
actual results to differ materially from those in the
forward-looking statements include corporate spending and
service-sector employment, price competition, acceptance of Knoll's
new products, the pricing and availability of raw materials and
components, foreign currency exchange, transportation costs, demand
for high quality, well designed office furniture solutions, changes
in the competitive marketplace, changes in the trends in the market
for office furniture, the financial strength and stability of our
suppliers, customers and dealers, access to capital, and other
risks identified in Knoll's annual report on Form 10-K, and other
filings with the Securities and Exchange Commission. Many of these
factors are outside of Knoll's control.
KNOLL,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in
thousands, except per share data)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
220,858
|
|
|
$
|
175,259
|
|
|
Cost of sales
|
|
|
152,457
|
|
|
|
118,598
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
68,401
|
|
|
|
56,661
|
|
|
Selling, general, and
administrative expenses
|
|
|
47,016
|
|
|
|
43,645
|
|
|
Restructuring charges
|
|
|
471
|
|
|
|
3,608
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
20,914
|
|
|
|
9,408
|
|
|
Interest expense
|
|
|
4,017
|
|
|
|
4,153
|
|
|
Other expense, net
|
|
|
2,328
|
|
|
|
1,413
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax
expense
|
|
|
14,569
|
|
|
|
3,842
|
|
|
Income tax expense
|
|
|
5,367
|
|
|
|
1,627
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
9,202
|
|
|
$
|
2,215
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
.20
|
|
|
$
|
.05
|
|
|
Diluted
|
|
$
|
.20
|
|
|
$
|
.05
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
46,160,748
|
|
|
|
45,626,903
|
|
|
Diluted
|
|
|
46,874,899
|
|
|
|
45,865,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KNOLL,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Dollars in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
2011
|
|
|
December
31,
2010
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,590
|
|
|
$
|
26,935
|
|
|
Customer receivables,
net
|
|
|
139,155
|
|
|
|
126,780
|
|
|
Inventories
|
|
|
92,756
|
|
|
|
85,216
|
|
|
Prepaid and other current
assets
|
|
|
20,548
|
|
|
|
22,229
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
257,049
|
|
|
|
261,160
|
|
|
Property, plant, and equipment,
net
|
|
|
121,771
|
|
|
|
122,219
|
|
|
Intangible assets,
net
|
|
|
298,076
|
|
|
|
298,347
|
|
|
Other noncurrent
assets
|
|
|
5,554
|
|
|
|
5,706
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
682,450
|
|
|
$
|
687,432
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term
debt
|
|
$
|
144
|
|
|
$
|
135
|
|
|
Accounts payable
|
|
|
97,072
|
|
|
|
101,206
|
|
|
Other current
liabilities
|
|
|
73,382
|
|
|
|
90,577
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
170,598
|
|
|
|
191,918
|
|
|
Long-term debt
|
|
|
242,000
|
|
|
|
245,000
|
|
|
Other noncurrent
liabilities
|
|
|
128,320
|
|
|
|
124,128
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
540,918
|
|
|
|
561,046
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
141,532
|
|
|
|
126,386
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
682,450
|
|
|
$
|
687,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KNOLL,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in
thousands)
|
|
|
|
Three Months
Ended March 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
9,202
|
|
|
$
|
2,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows (used in) provided by
provided by Operating Activities
|
|
|
(16,848)
|
|
|
|
11,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows used in Investing
Activities
|
|
|
(1,970)
|
|
|
|
(1,661)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows used in Financing
Activities
|
|
|
(5,201)
|
|
|
|
(5,676)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
|
|
1,674
|
|
|
|
(2,010)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) Increase in cash and
cash equivalents
|
|
|
(22,345)
|
|
|
|
2,174
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
|
|
26,935
|
|
|
|
5,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
|
$
|
4,590
|
|
|
$
|
8,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Knoll, Inc.